Photo: WAYHOME studio (Shutterstock) A financial windfall can come in many forms—inheritance, from a trust, stock options, winning the lottery, and to a lesser extent, government relief checks. It’s very common for people to spend much or all of a windfall right away , leaving them little to show for it. This is why you need a plan. Why a plan matters Your windfall won’t last if you don’t plan for how you will preserve the money. As an example, a third of Americans will blow through an inheritance within two years and be left with negative savings. Even lottery winners are more likely to declare bankruptcy within three to five years than the average American, the reason being that when managing money isn’t already a strong suit, misspending will simply scale up to match the amount of money there is to spend. While your financial situation and the size of the windfall may vary, financial advisors commonly suggest the following items as part of your spending plan: Assess your financial goals First, you’ll want to determine the net amount of your windfall and whether it’s taxed or paid out in installments, as that will affect your windfall spending plans. As an example, inheritance of a taxable asset can have complicated “ set up in basis ” tax implications, and inheritance of a 401(k) will have unique rules about when you have to take the funds. If the amount of your windfall is substantial, you might want to hire […]